WaMu 26% interest rate
Monday, April 28, 2008
Approaching $1 trillion in credit card debt? WaMu collection update
U.S. Credit Card Debt Soars to Unprecedented Heights
By Heide B. Malhotra
Epoch Times Washington D.C. Staff Apr 28, 2008Studies indicate that credit card defaults and related write-offs increased drastically since 2006.
WASHINGTON—Studies indicate that credit card defaults and related write-offs increased drastically since 2006. Today, lenders write off 33 percent more in credit card debt than they did two years ago.
Statistics show that about 35 percent of all credit card holders are already exhibiting signs of possible default. Late credit card payments result in fees many consumers can’t afford.
Credit card debt accelerated to unprecedented heights since bank loans began to dry up due to mortgage defaults. Total U.S. credit card debt reached almost $800 billion in November 2007, up from around $680 billion in March of last year, according to the latest available government statistics.
In the aftermath of the U.S. mortgage crisis, the credit card bubble may be next to burst. In the past few years, banks have aggressively marketed credit card ownership and usage to consumers with limited income and low credit scores. Credit card standards remain lax, while loan standards have tightened to a degree.
More than 50 percent of senior loan officers said in a January 2008 Federal Reserve survey that they performed a more rigorous analysis before approving a mortgage or car loan over the prior three months. Only 14 percent said so in a mid-2007 survey of the same nature. Banks and lenders have tightened their lending standards following the collapse of the subprime market.
With borrowing venues drying up, American consumers may be drawn to credit card debt, creating defaults similar to those in the mortgage market. Credit card debt—much like mortgages—are bundled and sold by investment banks as asset-backed securities.
The Next Credit Crisis?
“Rising credit card debt since April 2006 amid the decrease in the mortgage expansion rate resulted in a substantial shift to credit card borrowing from mortgage debt,” according to a recent report titled “House of Cards: Consumers Turn to Credit Cards Amid the Mortgage Crisis, Delaying Inevitable Defaults.” The report was published by the Center for American Progress (CAP), a nonpartisan Washington, D.C.-based research institute.
The rules of the credit card game usually aren’t transparent and are difficult to follow even by many sophisticated consumers. Just take any credit card agreement: Caveats are written in difficult-to-understand “legalese.” Words like “late fees, annual fees, over-limit fees, cash-advance fees, balance-transfer fees, annul fees, setup fees, fees to pay balance by telephone,” and so on, are confusingly sprinkled throughout the contract.
“Credit card debt tends to carry substantially higher costs than other forms of credit, due to myriad fees in addition to high interest rates. The result is that many borrowers unwittingly slide deeper and deeper into debt as they fall prey to the lack of transparency in credit cards,” said CAP staff.
“Double-cycling” billing is one of the most abused features by some credit card companies. For example, the cardholder charges $500 to the card, then repays $400 and leaves a $100 balance on the card. In “double-cycling” billing, the interest charge accrues not only on the $100 balance, but on the full $500 for the month. The terms are hidden somewhere in the initial credit agreement.
Students Most Vulnerable
University students are the most vulnerable victims of unscrupulous credit card tactics, according to a survey conducted between October 2007 and February 2008 by U.S. Public Interest Research Group (PIRG), a Boston, Mass.-based public interest advocate.
The study found that 66 percent of surveyed students have a credit card, 55 percent rely on credit cards for their daily needs and school supplies, and 30 percent have their charges paid for by their parents.
About 74 percent of surveyed students want credit card companies to curtail their marketing practices and establish monthly limits on how much the students can charge. They also would like universities to stop providing personal information—such as home address, e-mail address, and phone numbers—to credit card companies.
Credit card companies also offer student event funding and other “freebies” to campus associations and students.
Students are beginning to fight back and file complaints through legal and other venues because of “cards with unfair terms or ‘tricks and traps’ that result in massive penalty fees and the imposition of punitive interest rates at APRs [annual percentage rates] as high as 36 percent or more,” according to the PIRG report.
The report included a solicitation letter from a credit card company to The University of Iowa Alumni Association playing on the emotional side of the student in the first sentence: “Imagine the convenience of being able to purchase supplies for your classes, without worrying about carrying a lot of cash.”
The University of Iowa alumni leaders told PIRG that they earned around $1 million annually from Bank of America in credit card purchases by their members. They turn over $200,000 to the university; however, “some of the money given to the school is payment for $145,600 worth of football tickets used by Bank of America Representatives and others.”
Taking Action Against Predatory Marketing
Sen. Robert Menendez (D-NJ) initiated legislation in March 2008 called “The Credit Card Reform Act of 2008” that aims to stop predatory credit card marketing. So far, 11 consumer groups and unions have co-signed a letter in support of this legislation.
“We cannot allow predatory and deceptive practices in the credit card industry to continue as we did in the subprime mortgage market. We cannot allow the credit card problem to become the next foreclosure crisis,” said Menendez in a press release.
Rep. Carolyn Maloney (D-NY) and Rep. Barney Frank (D-Mass.), the chair of the House Financial Services Committee, introduced H.R. 5244, the “Credit Cardholder’s Bill of Rights” in February 2008.
New York Attorney General Andrew M. Cuomo charged First Premier Bank, based in South Dakota, with credit card fraud and fined the bank $105,000 in penalties last year. This bank also must make $4.5 million in restitution payments to customers it defrauded through its credit card program.
Ohio Attorney General Marc Dann went after Potbelly Sandwich Works, Citigroup, Inc., and Elite Marketing Group, Inc. for deceptive credit card practices on college campuses.
I didn’t know about First Premier, have yet to hear about any restitution checks.
“Total U.S. credit card debt reached almost $800 billion in November 2007, up from around $680 billion in March of last year ...”
So we should be getting close to $1 trillion. Few if any people can get cash-out refis to pay their credit cards off one more time.
WaMu called me again recently, despite my notice that I’d stop paying on the $4,500 biz card if they call me again.
They are so DUMB.
I LOVE to vote with my money!
And I’ve never made that much money in just a few minutes.
INSTANT justice!
No judge will screw me out of those $4,500. It felt so good.
The WaMu collectors always announce that they’re recording and I reply “me too!”
Then they refuse to give me permission to record. Thing is, I don’t ask for permission, I merely inform them. I don’t actually have to tell them that I’m recording because Arizona is a one party state, but while they’re disrupting my work, I might as well have some fun.
“Do you know how to HANG UP?”
And then they ARGUE. Maybe I’ll put together a CD with the funniest collection calls, might as well get some laughs out of all these disruptions. I’m usually focused on client work when I’m near the phone.
On a slow day I’ll have to send WaMu another Open Letter.
I’ve just been so busy. My seed potatoes arrived, got a variety including purple Peruvians. I’m way late with planting most veggies, but the grapes are looking good.
And the wild flowers are just magnificent this year, absolutely spectacular.
Tuesday, April 15, 2008
WaMu renewed collection efforts— “Let me s_ _ t $6,500”
One of my long-time clients ordered another settlement for one of her kids today and the collector had offered not to report the account as repo’d for payment in full of about $6,500. She wrote as her husband would say: “Let me s_ _ t $6,500” . I thought that was very funny.
So when WaMu just called because their collectors turned the account back over to them after they received my letter, I remembered that line.
The WaMu collector hadn’t read my Open Letter and didn’t want to read it. And apparently NONE of the collectors ever read any account notes.
She completely ignored me and at first was trying to intimidate me, I “had” to set up a payment. I asked whether she was threatening me, and she stated she wasn’t. Well, unless she threatens me I don’t HAVE to do anything.
Next she offered to reduce fees.
Yeah right. I asked her if anybody ever fell for that ploy, but I didn’t get a substantive answer.
I gave her my TIP OF THE DAY:
The closest court is in Kingman, please SUE me!
Of course she ignored my tip.
Next, she offered a settlement at 60%, over $5k.
“Do you think I shit money?”
WaMu: I didn’t say that ma’am.
Where the f*ck to you think it’s going to come from?
WaMu: Ok, ma’am, as far as this goes a 60% settlement is $5,457.93.
I’ll go to the bathroom right now and I’ll give it a try.
And then I hung up. I can’t believe I said that, but these collectors sure are irritating. Now that I think about it, I should have said:
“Do you think I can print money like the banks?”
Thing is, I could have a million dollars and I still wouldn’t pay them. Knowing what I know now, it would be like paying back Hitler or some other ruthless killer. The bankers run almost every country on the planet, they’re killing people by the millions and just about nobody is even trying to stop them. Most people don’t have the slightest clue and don’t want to get a clue.
It is my civic duty not to finance their murdering and plundering.
I have a MORAL obligation to do what little I can do to bring down the bankers.
Of course I know that it’s impossible and I didn’t say I’ll die trying. Not paying the banks is really not anything outrageous like plotting assassinations. It’s NOT criminal not to pay bank debts—unlike not paying the IRS.
Would I be doing this if I was wealthy?
Hell no, I wouldn’t have the slightest clue.
*** I wouldn’t know that they raise interest rates to 26% for people with perfect credit.
*** I wouldn’t know that banks CREATE money.
*** I wouldn’t have read Web of Debt and I wouldn’t have watched The Money Masters and Money as Debt.
And unless I can settle ALL my accounts, paying or settling wouldn’t even improve my credit. And I certainly wouldn’t pay 60%, maybe 15% or so.
Well, that’s my rant for the day. It’s good to get that first hand experience, see what my clients have to put up with. I don’t usually use “language”, but these collection morons sure are aggravating. And they are usually (not always) totally different when I call to settle client accounts.
Thursday, March 06, 2008
The WaMu insulting response to my Open Letter announcing that I would not pay them
I just updated my Open Letter and posted their response at Open Letter to WaMu: My refusal to pay my $8,000 WaMu (Providian) VISA card due to the 26% interest rate
They are SO stupid, it must hurt.
Maybe they’re all on medication or something ...
If they actually were a bank as defined by most people, they could have offered me a mortgage. If I got a $70k or so 30-year fixed rate mortgage at market rate, I’d be fine and I’d even pay them their $9k or whatever I owe now. But they’re NOT a bank. They have NO money. They’ve been making a ton of money by lending out money that THEY borrowed. That’s why they made so many BAD loans, they didn’t care, it wasn’t their money!
Home Savings (now WaMu) once was a big portfolio lender, they made the rules. Now that the geniuses in Congress and the regulators decided to tighten rules, there’s very little business and obviously housing values decline even further. And there are people like me who don’t qualify for mortgages anymore.
As a DIRECT result of the banks’ reckless lending, I couldn’t get a mortgage if my life depended on it.
I had a good plan when I started building my house, to refinance the credit cards into a mortgage once I’m finished. I even accounted for construction delays and cost overruns and I’d be alright paying around 10% interest on credit cards, $800 or so a month. Of course I got much LESS than expected for my old place when I sold last summer and now most credit cards are around 20%.
My credit was perfect and I paid ALL MY BILLS ON TIME until I stopped paying WaMu.
It’s just not worth the hassle. And the WaMu response to my Open Letter is nothing but a giant insult.
I like the solution in Money As Debt, making banks non profits who give their profits back to society. That’s how Damanhur finances some of their projects. It simply makes no sense to allow ANYONE to get rich off doing NOTHING but exploiting people.
Tuesday, January 15, 2008
WaMu M/C 14.5% interest less than a year after bankruptcy, but I get 26% with PERFECT credit
A CreditFactors subscriber filed for bankruptcy in 4/07 and the FICO scores are now in the 620 - 640 range. He got a $5,500 WaMu credit card at 14.5% interest with a 0% balance/transfer offer for 9 months.
Washington Mutual charges me 26% with PERFECT credit.
I have not heard from WaMu since before Christmas. Am about $900 delinquent now.
Thursday, December 20, 2007
WaMu legal problems - chief legal officer Chapman retires
As Legal Troubles Mount, WaMu’s Top Lawyer Exits Stage
Washington Mutual Inc. abruptly announced the retirement of its chief legal officer after 10 years with the savings and loan, which has been struggling with mounting legal problems related to its exposure to the subprime market.
The Seattle-based company said its senior executive vice president and chief legal officer Fay L. Chapman will retire after joining the company is 1997.
The 61-year-old Chapman will serve as a consultant to the bank for two years to provide assistance with the transition and provide special counsel, according to Washington Mutual.
“Fay has been a key advisor to our executive team throughout her career at WaMu, and we owe a great deal of gratitude to Fay for her years of dedication and tremendous contributions to our success,” said chairman and CEO Kerry Killinger.
Washington Mutual said its board hired Heidrick and Struggles to help search for a permanent replacement while Stewart M. Landefeld serves as interim chief legal officer.
Landefeld is a partner with Perkins Coie LLP, a Seattle-based international law firm, where he has been chair of the firm’s business practice group.
Since mid-September, shares of Washington Mutual have plunged more than 60% following a series of bleak disclosures abut the company’s finances and legal problems.
WaMu was pressured to suspend its relationship with eAppraiseIT after the New York Attorney General Andrew Cuomo filed a lawsuit against the appraisal subsidiary of First American.
The suit charged both the company and its subsidiary with caving in to pressure from Washington Mutual to use “proven appraisers” who inflated appraisals.
“By allowing Washington Mutual to hand-pick appraisers who inflated values, First American helped set the current mortgage crisis in motion,” said Cuomo.
Cuomo said that Washington Mutual wasn’t named as a defendant because his jurisdiction does not extend to the federally chartered lender.
In November, the savings and loan said it would pay $38 million related to Visa Inc.’s settlement with credit card rival American Express Co. for allegations that Visa illegally stifled competition to protect its position as the largest U.S. credit-card network.
Washington Mutual recognized a $38 million charge to its 2007 third-quarter results of operations and had to lower third-quarter profit by $24 million.
Later that month, employees participating in the company’s 401(k) plan filed a class-action lawsuit, charging the company with failing to adequately monitor the plan and advise the participants when the company stock investment began to plummet.
According to the lawsuit, the employees suffered total financial losses of more than $150 million.
The suit alleges that the fiduciaries are legally responsible to restore any losses to the plan resulting from mismanagement.
Under ERISA law, participating employees can bring a civil action on behalf of a retirement plan against companies and individuals that breach any of the duties outlined for a fiduciary, according to the complaint.
A spokesperson at Washington Mutual made assurances that there was no connection between the legal troubles and departure of their chief legal officer.
I can see why WaMu’s fax lines are disconnected.
